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The Top 10 DividendRank'ed Canadian Stocks PDF Print E-mail
Written by Canada Stock Channel   
Wednesday, 25 June 2014 07:08

#1. Dream Office Real Estate Investment Trust (TSE:D.UN.CA) — 7.6% YIELD

Dream Office Real Estate Investment Trust is an open-ended investment trust. The trust is engaged in the provision of business premises and management services to its tenants and other businesses in Canada. As of Dec 31 2010, Co. owned a diversified portfolio of 111 office and industrial properties offering approx. 12,300,000 sq. ft. of gross leasable area.

Click HERE or Chart to view 1-10 in much more detail - Editor Money Talks



Click HERE or Chart to view 1-10 in much more detail - Editor Money Talks

War Cycles Sending Gold, Mining Shares Soaring PDF Print E-mail
Written by Larry Edelson: Swing Trading   
Monday, 23 June 2014 07:03

We Americans are watching the events unfold in Iraq with great trepidation. Rising terrorism and rising energy prices. Déjà vu all over again.

And gold is reacting, soaring like a bat out of hell. Up more than $50 last Thursday alone.

A huge move reminiscent of the blastoff phase in late 1978 when gold exploded from a low of $193.40 in November to a high of $875 in January 1980 — a parabolic 352 percent move higher in the price of gold in a tad over two short years.

Thus far for June, gold is up an amazing $82, almost 6.7 percent. Mining shares are doing even better, with the ARCA Gold Bugs Index up 16.7 percent.

The chart shows Basket of gold miners up 16.7% in 20 days— while some of my favorite miners are up even more, as much as 40% in 20 days.chart1s11

These are real moves. More importantly, they are market moves that tell you that it’s not just us Americans who are worried about the world and starting to buy gold again. The entire investment community — and anyone in their right mind — is worried.

That’s not surprising, considering the sorry state of affairs the world is embarking upon.

It’s not surprising, considering that I have warned you repeatedly of the ramping up of the war cycles. Cycles that govern human social interaction on a grand scale, cycles that can be quantified and used to forecast periods of peace and war, periods of civil unrest and international conflict.

And those cycles are now ramping up and converging in the worst possible combination of forces not seen since the late 1800s.

These are the cycles that are responsible for all that you are now seeing …

– Russia versus Ukraine and other former Soviet satellites, versus Europe and the U.S.

– The reign of terror by the Islamic State in Iraq and Syria (ISIS) in Iraq. This group of terrorists is so violent andextreme that they were kicked out of Al-Qaeda. And now they are the most well-funded terror group in the world with nearly $500 million in the bank and they are ravaging Iraq and headed on to Jordan and other Middle Eastern countries.

– Nigeria, where Boko Haram Islamists have killed hundreds of villagers and kidnapped hundreds of women by posing as Nigerian soldiers, rounding everyone up, and opening fire.

– Kenya, where the Al-Qaeda affiliate Al-Shabab terrorist group is responsible for the recent bloodbath that took place in Mpekeoni, a well-known tourist area.  And where nine more people have been massacred by Islamic extremists and Al-Shabab in the coastal areas … and an additional 48 World Cup fans were killed in Mpeketoni.

– Pakistan, where more than 70,000 civilians are now homeless refugees, fleeing from government troops who killed 105 militants in North Waziristan’s Shawal area.

– Canada, where a Calgary suicide bomber who killed 19 Iraqis has become a propaganda tool for jihadists, who are urging Muslims to follow his “great example” and threatening Canada to change its “oppressive” foreign policies.

– China, where the Chinese government recently executed 13 people in the Xinjiang region who were found guilty of organizing and leading terrorist groups, as well as murder, arson, theft and other crimes.

– China versus Japan, Vietnam, Indonesia, Malaysia, the Philippines, in an international dispute over the Spratly and Senkaku Islands and their vast oil and gas reserves … and where China is claiming territorial jurisdiction, seizing land and waters away from countries, a dispute that will ultimately lead to an international war.

– Then there’s Syria, Yemen, Egypt, Turkey, Iran, North Korea, Venezuela, Myanmar, Libya, and a host of other countries where violence is rapidly rising.

All told, there are now a record 61 countries involved in wars and 540 militia, anarchist, religious and separatist groups.

And lest you think the turmoil you are seeing is all terrorist-related, or isolated events that do not impact you, think again:

The rising war cycles are also about bankrupt, destitute governments that are now acting like caged animals, striking out against their own people …

By raising taxes, engaging in confiscatory wealth measures and capital controls, by spying on their own citizens and more.


– Last March’s Cyprus confiscation of depositor wealth to bail out Cyprus’ banks, a policy that has now been embraced and legalized for all of Europe. Have money in a European bank? Good luck, if it goes under, your money is at risk of being confiscated.

– Last September’s confiscation of retirement accounts by Poland’s government. Fully half of all private retirement assets transferred to the state without offering retirees any compensation whatsoever.

– France’s SEVENTY-FIVE percent income tax. And to counter, where France’s Marine Le Pen’s Front National is championing a recent report by well-known French economists that concluded that 60 percent of French public debt is illegitimate, sowing the seeds for a French sovereign debt default down the road.

 – Argentina, where massive sovereign debts are now unpayable, and confiscatory measures against pensions are now in the planning stage by President Cristina Kirchner.

– Or Washington’s incessant spying on YOU, all designed to track everything you do, every penny you spend or squirrel away.

In short, all over the globe the rising tide of geo-political unrest is occurring at a pace at which even I underestimated.

You may think all these conflicts are unrelated … or the
result of religious extremists … or that they have no impact on you.

But mark my words: Look closely, as I have done, at all of the conflicts around the world — whether religiously inspired or not — and you will see two common threads:

1. Private sector groups rising up against authoritarian, unjust, corrupt and imperialist governments.

2. Private sector groups rising up against governments that want to increase taxes or even confiscate wealth while, at the same time, levying austerity measures on its people to slash previously promised benefits.

In lesser developed countries, it’s the result of government corruption, imperialistic actions taken by developed countries, pillaging of natural resources, and more. Yes, they are shrouded in religious, especially Islamic extremism …

But when distilled down to the truth, the forces driving them are no different than the forces that are driving the civil and international unrest you are now seeing in developed countries.

It’s merely a matter of degree. Yet an impartial and objective study of the forces that are driving the war cycles higher — wherever in the world they are playing themselves out …

Can all be distilled down to a great battle between the public and the private sectors.

These are the chief reasons gold and 
silver are now starting to explode higher.

And why gold will likely fetch well over $5,000 an ounce a few years from now … silver to more than $125 an ounce … and mining shares,  to the moon.

Best wishes and stay tuned,


The post War Cycles Sending Gold, Mining Shares SOARING! appeared first on Money and Markets – Financial Advice | Financial Investment Newsletter.

Returns We Can Expect From The Stock Market PDF Print E-mail
Written by Warren Buffet via Guru Insider   
Friday, 20 June 2014 01:17

Two views, one from Forbes Magazine's June 30th Issue titled How Much Will You Earn On Your Stocks And Bonds? and the following with an interesting take right underneath 1. Interest Rate  - Editor Money Talks

What Returns Can We Expect From The Stock Market

As pointed by Warren Buffett, the percentage of total market cap (TMC) relative to the US GNP is “probably the best single measure of where valuations stand at any given moment.”

As of today, the Total Market Index is at $ 20796.5 billion, which is about 121.6% of the last reported GDP. The US stock market is positioned for an average annualized return of 1.2%, estimated from the historical valuations of the stock market. This includes the returns from the dividends, currently yielding at 2%.

Over the long term, the returns from stock market are determined by these factors: 

1. Interest rate 

Interest rates “act on financial valuations the way gravity acts on matter: The higher the rate, the greater the downward pull. That's because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities. So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line. Conversely, if government interest rates fall, the move pushes the prices of all other investments upward.”—Warren Buffett 

2. Long Term Growth of Corporate Profitability 

Over the long term, corporate profitability reverts to its long term-trend, which is around 6%. During recessions, corporate profit margins shrink, and during economic growth periods, corporate profit margins expand. However, long-term growth of corporate profitability is close to long-term economic growth. The size of the US economy is measured by Gross National Product (GNP). Although GNP is different from GDP (gross domestic product), the two numbers have always been within 1% of each other. For the purpose of calculation, GDP is used here. The U.S. GDP since 1970 is represented by the green line in the first of the three charts to the right. 

3. Market Valuations 

Over the long run, stock market valuation reverts to its mean. A higher current valuation certainly correlates with lower long-term returns in the future. On the other hand, a lower current valuation level correlates with a higher long-term return. The total market valuation is measured by the ratio of total market cap (TMC) to GNP -- the equation representing Warren Buffett's "best single measure". This ratio since 1970 is shown in the second chart to the right. calculates and updates this ratio daily. As of 06/19/2014, this ratio is 121.6%.

We can see that, during the past four decades, the TMC/GNP ratio has varied within a very wide range. The lowest point was about 35% in the previous deep recession of 1982, while the highest point was 148% during the tech bubble in 2000. The market went from extremely undervalued in 1982 to extremely overvalued in 2000.

Based on these historical valuations, we have divided market valuation into five zones:

Ratio = Total Market Cap / GDPValuation
 Ratio < 50% Significantly Undervalued
 50% < Ratio < 75% Modestly Undervalued
 75% < Ratio < 90% Fair Valued
 90% < Ratio < 115% Modestly Overvalued
 Ratio > 115% Significantly Overvalued
 Where are we today (06/19/2014)? Ratio = 121.6%Significantly Overvalued


A quick refresher (Thanks to Greenbacked): GDP is “the total market value of goods and services produced within the borders of a country.” GNP is “is the total market value of goods and services produced by the residents of a country, even if they’re living abroad. So if a U.S. resident earns money from an investment overseas, that value would be included in GNP (but not GDP).” While the distinction between the two is important because American firms are increasing the amount of business they do internationally, the actual difference between GNP and GDP is minimal as this chart from the St Louis Fed demonstrates:


GDP in Q4 2012 stood at $15,851.2 billion. GNP at Q3 2012 (the last data point available) stood at $16,054.2 billion. For our present purposes, one substitutes equally as well for the other. 

The Sources of Investment Returns

The returns of investing in an individual stock or in the entire stock market are determined by these three factors: 

1. Business growth 

If we look at a particular business, the value of the business is determined by how much money this business can make. The growth in the value of the business comes from the growth of the earnings of the business growth. This growth in the business value is reflected as the price appreciation of the company stock if the market recognizes the value, which it does, eventually. 

If we look at the overall economy, the growth in the value of the entire stock market comes from the growth of corporate earnings. As we discussed above, over thelong term, corporate earnings grow as fast as the economy itself. 

2. Dividends 

Dividends are an important portion of the investment return. Dividends come from the cash earning of a business. Everything equal, a higher dividend payout ratio, in principle, should result in a lower growth rate. Therefore, if a company pays out dividends while still growing earnings, the dividend is an additional return for the shareholders besides the appreciation of the business value. 

3. Change in the market valuation

Although the value of a business does not change overnight, its stock price often does. The market valuation is usually measured by the well-known ratios such as P/E, P/S, P/B etc. These ratios can be applied to individual businesses, as well as the overall market. The ratio Warren Buffett uses for market valuation, TMC/GNP, is equivalent to the P/S ratio of the economy.

What Returns Is the Market Likely to Deliver From This Level?

Putting all the three factors together, the return of an investment can be estimated by the following formula: 

Investment Return (%) = Dividend Yield (%)+ Business Growth (%)+ Change of Valuation (%) 

The first two items of the equation are straightforward. The third item can be calculated if we know the beginning and the ending market ratios of the time period (T) considered. If we assumed the beginning ratio is Rb, and the ending ratio is Re, then the contribution in the change of the valuation can be calculated from this: 


The investment return is thus equal to: 

Investment Return (%) = Dividend Yield (%) + Business Growth(%) + (Re/Rb)(1/T)-1 

This equation is actually very close to what Dr. John Hussman uses to calculate market valuations. From this equation we can calculate the likely returns an investment in the stock market will generate over a given time period. In the calculation, the time period we used was 8 years, which is about the length of a full economic cycle. The calculated results are shown in the final chart to the right. The green line indicates the expected return if the market trends towards being undervalued (TMC/GNP=40%) over the next 8 years from current levels, the red line indicates the return if the market trends towards being overvalued (TMC/GNP=120%) over the next 8 years. The brown line indicates the return if the market trends towards being fair-valued (TMC/GNP=80%) over the next 8 years.

The thick light blue line in the bottom right chart is the actual annualized return of the stock market over 8 years. We can see the calculations largely predicted the trend in the returns of the stock market. The swing of the market’s returns is related to the change in interest rates.

It has been unfortunate for investors who entered the market after the late 1990s. Since that time, the market has nearly always been overvalued, only dropping to fairly valued since the declines that began in 2008. Since Oct. 2008, for the first time in 15 years, the market has been positioned for meaningful positive returns.

As of 06/19/2014, the stock market is likely to return 1.2% a year in the next 8 years.

Warren Buffett’s Market Calls

Based on these factors, Warren Buffett has made a few market calls in the past. In Nov. 1999, when the Dow was at 11,000, and just a few months before the burst of dotcom bubble, the stock market had gained 13% a year from 1981-1998. Warren Buffett said in a speech to friends and business leaders, “I'd like to argue that we can't come even remotely close to that 12.9... If you strip out the inflation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more.” 

Two years after the Nov. 1999 article, when the Dow was down to 9,000, Mr. Buffett said, “I would expect now to see long-term returns run somewhat higher, in the neighborhood of 7% after costs.” 

Nine years have passed since the publication of the article of November 22, 1999, and it has been a wild and painful ride for most investors; the Dow climbed as high as 14,000 in October 2007 and retreated painfully back to 8,000 today. Warren Buffettagain wrote in Oct. 2008: Equities will almost certainly outperform cash over the next decade, probably by a substantial degree.”

Related Links:

1. Warren Buffett Stock Picks
2. Buffett-Munger Screener: The stocks young Warren Buffett would buy
3. Market Valuations as measured by Shiller P/E ratio


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Mark Leibovit
23 July 2014 ~ Michael Campbell's Commentary Service

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